Public Act 93-0287
SB1116 Enrolled LRB093 11060 MBS 11764 b
AN ACT in relation to financial matters.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Financial Services Development
Act is amended by changing Section 8 as follows:
(205 ILCS 675/8) (from Ch. 17, par. 7008)
Sec. 8. Amendment of governing agreement.
(a) If the agreement governing a revolving credit plan
so provides or allows, a financial institution may at any
time or from time to time amend the terms of such agreement
in accordance with the further provisions of this Section 8.
The financial institution shall notify each affected borrower
of the amendment in the manner set forth in the agreement
governing the plan and in compliance with the requirements of
the Truth-in-Lending Act and regulations promulgated
thereunder, as in effect from time to time, if applicable.
(b) Subject to subsection (c) below, if the terms of the
agreement governing the plan, as originally drawn or as
amended pursuant to this Section so provide, any amendment
may, on and after the date upon which it becomes effective as
to a particular borrower, apply to all then outstanding
unpaid indebtedness in the borrower's account under the plan,
including any such indebtedness which shall have arisen out
of purchases made or loans obtained prior to the effective
date of the amendment.
(c) If such amendment has the effect of increasing the
interest or other charges to be paid by the borrower, the
financial institution shall mail or deliver to the borrower,
at least 30 days before the effective date of the amendment,
a clear and conspicuous written notice which shall:
(1) describe the amendment and the existing term or
terms of the agreement affected by the amendment,
(2) set forth the effective date of the amendment,
(3) state whether or not the amendment will apply
to the outstanding unpaid indebtedness as of the
effective date of the amendment,
(4) state that absent the borrower's written notice
to the financial institution within 30 days of the
earlier of the mailing or delivery of the notice of
amendment that the borrower does not agree to accept the
amendment, the amendment will become effective and apply
to the borrower's account, and
(5) provide an address to which the borrower may
send notice of the borrower's election not to accept the
amendment and include an addressed postcard that the
borrower may return to the financial institution for that
purpose.
(c-5) If such amendment results in an unfavorable change
in the interest or other charges on a revolving credit plan
which: (i) relates to a change in the borrower's credit
standing, (ii) does not affect all or a substantial portion
of a class of the creditor's accounts, and (iii) does not
relate to inactivity, default, or delinquency on that
revolving credit plan, the financial institution shall
include in the notice required by subsection (c) of this
Section 8 a statement that is substantially similar to the
following:
Change in Credit Standing
The amendment to the terms of your account relates
to a change in your credit standing. The change in your
credit standing may have resulted from a default or
delinquency on other accounts you may have, or other
adverse changes in your financial circumstances. If you
submit the enclosed postcard or otherwise notify us in a
timely manner as provided in this notice that you do not
accept the amendment, you will be able to pay off your
existing balance at the rate in effect prior to the
amendment. However, in that instance, you may not be
eligible to obtain additional credit under this plan
after the effective date of the amendment. If you do not
provide timely notice to us as provided in this notice
that you do not accept the amendment, the amendment to
the terms of your account will become effective and apply
to your account.
(c-10) As a condition to the effectiveness of the
borrower's notice not to accept the amendment, the financial
institution may require the borrower to return all credit
devices.
Any borrower who gives a timely notice electing not to
accept the amendment shall be permitted to pay the
outstanding unpaid indebtedness in the borrower's account
under the plan in accordance with the terms of the agreement
governing the plan without giving effect to the amendment.
Notwithstanding the financial institution's receipt of
the borrower's notice under item (4) that the borrower does
not accept the amendment, the amendment shall be deemed to
have been accepted and effective with respect to the borrower
and the borrower's account if the borrower uses the credit
device to obtain credit under the credit plan on or after the
effective date of the amendment, and the amendment shall be
deemed effective as of the effective date originally
disclosed by the financial institution.
(d) For purposes of this Section, the following shall
not be deemed an amendment which has the effect of increasing
the interest to be paid by the borrower:
(1) a decrease in the required amount of periodic
installment payments; and
(2) a change from a daily periodic rate to a
periodic rate other than daily, or from a periodic rate
other than daily to a daily periodic rate, provided that
there is no resulting change in the annual percentage
rate as determined in accordance with the
Truth-in-Lending Act and regulations promulgated
thereunder, as in effect from time to time.
(Source: P.A. 88-531.)
Section 10. The Tax Refund Anticipation Loan Disclosure
Act is amended by changing Section 10 as follows:
(815 ILCS 177/10)
Sec. 10. Disclosure requirements. At the time a
borrower applies for a refund anticipation loan, a
facilitator shall disclose to the borrower on a document that
is separate from the loan application:
(1) the refund anticipation loan fee schedule;
(1.5) the Annual Percentage Rate utilizing a 10-day
time period;
(2) the estimated fee for preparing and
electronically filing a tax return;
(2.5) the total cost to the borrower for utilizing
a refund anticipation loan;
(3) the estimated date that the loan proceeds will
be paid to the borrower if the loan is approved;
(4) that the borrower is responsible for repayment
of the loan and related fees in the event the tax refund
is not paid or not paid in full; and
(5) the availability of electronic filing for the
income tax return of the borrower and the average time
announced by the federal Internal Revenue Service within
which the borrower can expect to receive a refund if the
borrower's return is filed electronically and the
borrower does not obtain a refund anticipation loan.
(Source: P.A. 92-664, eff. 1-1-03.)
Section 99. Effective date. This Act takes effect on
January 1, 2004.